Does the release in the Itan franchise agreement cover claims arising from the offer of the franchise?
Itan Franchise · 2025 FDDAnswer from 2025 FDD Document
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- Release. Owner, you, and each of your officers, directors, shareholders, members, owners, employees, agents, representatives, affiliates, parents, divisions, successors and assigns, and all persons or firms claiming by, through, under, or on behalf of any or all of them (the "Franchisee Parties"), hereby release, acquit and forever discharge us, any and all of our past and present affiliates, parents, subsidiaries and related companies, divisions and partnerships, consultants, advisors and franchise sellers and its and their respective past and present officers, directors, shareholders, members, owners, employees, agents, representatives, affiliates, parents, divisions, successors and assigns, and the spouses of such individuals (collectively, the "Franchisor Parties"), from any and all claims, liabilities, damages, expenses, actions or causes of action which any of the Franchisee Parties may now have or has ever had, whether known or unknown, past or present, absolute or contingent, suspected or unsuspected, of any nature whatsoever, directly or indirectly arising out of or relating to the execution and performance (or lack thereof) of the Franchise Agreement or the offer, sale or acceptance of the franchise related thereto (including, but not limited to any disclosures and representations made in connection therewith). The foregoing release shall not be construed to apply with respect to any obligations contained within this Agreement.
Source: Item 23 — RECEIPT (FDD pages 44–190)
What This Means (2025 FDD)
According to Itan's 2025 Franchise Disclosure Document, the franchise agreement includes a release that covers claims arising from the offer, sale, or acceptance of the franchise. This release requires the franchisee to discharge Itan and its affiliates from any claims related to the franchise agreement, including those related to disclosures and representations made during the franchise offer. This broad release encompasses both known and unknown claims that the franchisee may have against Itan. However, this release does not apply to any obligations contained within the franchise agreement itself.
Notably, the FDD includes specific clauses addressing the release's applicability in certain states. For instance, the general release does not apply to claims arising under the Washington Franchise Investment Protection Act for franchisees in Washington. Similarly, for franchisees in Maryland, the release does not waive any liability under the Maryland Franchise Law. Furthermore, the FDD states that any acknowledgements or representations by the franchisee disclaiming violations of Maryland law will not act as a release, estoppel, or waiver of liability under Maryland law.
Prospective Itan franchisees should carefully review the release and understand its implications, especially concerning potential claims they may have against the franchisor. Franchisees should also be aware of the specific state laws that may limit the enforceability of the release. It is advisable to seek legal counsel to fully understand the scope and impact of the release before signing the franchise agreement. This is particularly important in states like Washington, Maryland, Indiana, and Michigan, where specific franchise laws may affect the enforceability of certain provisions.